If you have a chance, visit a SVCM operation and watch the consumers. They pick up the products, check the nutrition information, and buy multiple items. One consumer stated: “With the wide range of products and sizes, I now have the ability to select; with vending, I felt that I was being dictated as to what I had to buy.”
One critical omission from the SCVM sales in the installations tested was coffee. The average monthly sales figure of $6,888 does not include any coffee sales.
Coffee at all six locations was provided by traditional OCS.
Coffee can be sold through SCVMs. The opportunity to include coffee sales through the SCVMs will be critical to profitability.
A closer look at the numbers
Both Avanti and 365 have provided ROI pro formas based on annual sales through the SCVMs in the range of $32,000 to $100,000.
The 365 pro forma offers scenarios for stored value card sales, combined credit card and cash sales, and credit card only sales. The pro forma considers product cost, shrinkage, depreciation, labor, utilities, parts, credit card expense and depreciation.
The Avanti pro forma compares the SCVM to a vending bank and considers product costs, shrinkage, depreciation, labor, utilities, vehicle costs, parts, credit card costs, sales taxes and overhead.
The pro formas are comprehensive, but in reviewing them, several questions arise. Given the importance of food, neither pro forma addressed the critical issue of spoilage, which most vending operators know severely compromises the profitability of refrigerated food.
Another question concerns the locations where the SCVM failed, and of course, the reasons for such failure.
Vending Consultants will be expanding its analysis of SCVM sales to include refining food sales and quantifying sales per person at each location.
In addition, vending operators should be aware that management companies will provide a complete range of services, including financing, for vending operators to successfully install SCVMs.
Your vending consumers are being educated about self checkout cold beverage and food products. Retail locations are no longer purchasing cash registers. Soon, vending operators will be concentrating on purchasing SCVMs.
For information, contact:
365 Retail Markets, 888-365-7382, www.365retailmarkets.com
Avanti Markets, 877-242-5851, www.avantimarkets.com
Breakroom Provisions Co., 888-282-0689, www.breakprovisions.com